One of the nation’s oldest colleges says it is in danger of closing its doors, in part because of the pandemic. Becker College, in Worcester, Mass., has suspended recruiting for the coming academic year, and the institution, alongside state regulators and its accreditor, is undertaking “contingency closure planning.”
“Owing in large part to the impact of the coronavirus (Covid-19), Becker College’s financial situation has become sufficiently uncertain such that the Department of Higher Education … believes that the institution is unlikely to sustain full operations through the next academic year,” according to a statement from the Massachusetts Department of Higher Education and the New England Commission of Higher Education.
Becker could join a growing list of private nonprofit colleges that cite the coronavirus outbreak as a contributing factor in their decision to close or merge their operations with other institutions. They include Holy Family College, in Wisconsin; MacMurray College, in Illinois; Concordia College in New York; and Pine Manor College, in Massachusetts.
Though some financially distressed colleges and universities have been known to draw regulatory scrutiny in the years preceding closure or merger, Becker did not. Becker’s accreditor declared it to be in compliance with all of the organization’s standards in March 2018. And the institution’s financial health wasn’t precarious enough at the start of 2020 to justify heightened cash monitoring by the U.S. Department of Education. Still, the institution’s cash reserves were hardly ready to sustain a shock as sudden and violent as the economic fallout from the pandemic.
While Becker’s total spending in the 2019 fiscal year amounted to more than $46 million, the college estimated that it would be able to rustle up only around $1.7 million in unrestricted liquidity to meet a year’s worth of financial obligations. Were additional liquidity needed, the college said it would seek to convert donor-restricted gifts into cash, and draw on lines of credit.
Three out of every 10 undergraduates at Becker were Pell Grant recipients in the 2019 academic year, the most recent year for which such data are available. The total value of the college’s entire endowment was less than $5 million at the close of the 2019 fiscal year, and all of those funds at the time carried specific restrictions from donors on what those dollars could and could not finance.
